Douglas's production work on a few of Hendrix's posthumous releases is controversial. This is primarily due to tracks on the Crash Landing and Midnight Lightning LP releases in 1975. On these releases Douglas replaced the original drum and bass tracks and added guitar overdubs newly recorded by session musicians. He added female backing singers to one track, and claimed co-composer credit on several tracks that he had altered. On the much later Voodoo Soup compilation album Douglas is known to have wiped original drum tracks on two songs and replaced them with Bruce Gary. Second, on the 1993 CD releases of Hendrix's three studio albums, the original album artwork and packaging were scrapped in favour of new renderings of the Jimi Hendrix Experience.

Douglas's work on Hendrix releases was defended by rock journalist and critic John Masouri, who in 2001 called him "one of the last great musical visionaries", and said he had been right to try to improve the original tracks: "wisely he'd also edited out passages where Jimi had toyed with a riff repeatedly, searching for just the right phrase... All things considered, it's highly unlikely that Hendrix would have sanctioned the release of poorly executed material, yet the die was cast, and the producer has been branded a controversial figure ever since."[2]

In interviews[citation needed], guitarist John McLaughlin has criticized Douglas's handling of his own LP Devotion (1970), as well, closely related to Hendrix's Band of Gypsys sessions. But Umar Bin Hassan, a member of the Last Poets, said following Douglas's death that "whether you liked him or didn't, you had to admit that he was one of the giants in what he did, which was to put out responsible, intelligent and remarkable music."[2] Douglas was credited with being the first record producer to record a rap album.

In 1995 Douglas lost control of the Hendrix archive to Hendrix's father, Al. After years of legal wrangling, Douglas was able to obtain the right to compile Hendrix's writings into a book, Starting From Zero, which was published in late 2013. He was also planning a documentary film of the same title which remained unreleased at the time of his death.[2]